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and China. I'm Joe Matthew in Washington. President Biden ends a tough year on a high note. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three, on New York Bloomberg one, Washington d C, Bloomberg one oh six one Boston, Bloomberg nine sixties, San Francisco, d A B Digital Radio, London, Sirius XM one nine ten, and around the world on Bloomberg Radio dot com and via the Bloomberg Business App. Good day to you. I'm Amy

more As we begin today's program with housing. A bunch of housing data coming next week, including pending home sales for November economists we've surveyed are forecasting another drop. You remember, pending sales fell in October as buyers faced mortgage rates pretty much at twenty year highs. Pending home sales are a leading indicator, so we're watching that one closely for you here this coming Wednesday, with live coverage breaking it

all down for you on Bloomberg Radio. Existing home sales also fell in November, but it's interesting some are saying home sales may not fall much more from here, including Mark Zandy of Moody's Analytics. Yeah, I think in terms of home sales, I think we're pretty close to the bottom, pretty close to the bottom, and that reflects the peak in mortgage rates, which we're back a couple of months ago when they were significantly north of seven percent for

three year fix. Now we're down closer to six percent and I don't think we're going back to over seven again. So I think we're pretty close to the bottom and sales now. Mark's Andy of Moody's Analytics also tells us that home prices could fall more from here because mortgages are still just taking up too much of people's paychecks right now. You're right, I mean affordability has been completely

hammered here, and that's the fundamental issue. You know, you mix the high mortgage rates with the high previously high house prices, it's just too much to bear. I mean, I think the average monthly payment for a typical for American buying a typical priced home is up the seven eight hundred bucks from where it was about a year ago. And that's just not affordable. So we need a combination to get restore affordability and get demand moving in the

right direction again. We need a combination of of lower mortgage rates, lower house prices, and rising incomes. And my senses, if mortgage rates come in back to you know, five and a half percentag is, which is where I would expect them in the long run, incomes continue to rise, we don't go into recession. We need about a ten percent decline in house prices to restore for affordability sufficiently.

That probably won't happen until late going into twenty I think we've got a couple of years here before affordability we'll get to a place where you know, demand will start to improve again, significantly improve. Now. Mark Zany, chief economist of Moodies Analytics, also tells us he thinks the Fed does not need to go too much higher on its benchmark interest rate, and one reason he thinks inflation

is abating is that rents are coming down. Market rents, you know, the rents that are being charged people that are signing leases today, they've suddenly gone week and down for uh for in part because rents are so high that people can't afford to rent. So you had so called demand destruction and a lot more supply. The supply chains are easing and builders can get appliances and building materials.

Labor markets are easing. For an Immigrants that work in construction sites are getting on the job, getting a lot more properties going across the finish line to completion. More more supply less demand. Rents are weak, and that's gonna show up in the cost of housing services over the course of the next six, six and twelve months. And that's one reason I feel reasonably confident that inflation's gonna

be coming in here pretty quickly. We're also going to be getting the SNP Cora Logic Home Price Index this coming Tuesday that is expected to show home prices fell about one and a half percent monthly in October, but still gained more than eight percent year on year. Michael fred Antoni is chief economist at the Mortgage Bankers Association and says, if mortgage rates stay lower than the October peak, we could see a big wave of home buying starting

this coming March and April. If we can keep rates six, maybe a little bit below stakes as we get into the first quarter of next year, when we're at the beginning of the spring buying season, that's really going to be impactful. A lot of the folks have stepped away from the market in two and May and June because of that sticker shock and stayed away through the fall. They still need to live somewhere. They're still seeing their

rent increase. So I'm not going to be surprised if the market shifts a bit more towards sort of the first time home buyer segment, because again, a lot of the folks that would have planned to have bought last year put it off. Give him this Vike and raid swee had just a little bit of leite of relief

and mortgage rage, they could come back. Michael fred Antonia is chief economist at the Mortgage Bankers Association, and he also tells us he thinks that nationally home prices won't fall too much more next year, maybe one down on the year. We'll be getting more data on that from the f hf A this coming Tuesday. As well. Housing demand very affected by the ability to get a mortgage. Another thing we're watching in the housing market how big banks are doing on their promise to boost lending to

black homebuyers. Joining me now to talk about this very important part of the housing story that's shaping the economic health of housing and black Americans in the months and years to come, Bloomberg Senior economics writer Sean Donnan. Sean, it is always a pleasure. Thanks for taking the time with us. Hey, thanks so much for having me. Now set the stage for me here. You did a deep five into a block in Baltimore. Um, and this actually wound up being a feature story in a Bloomberg Big

take on the Bloomberg Terminal. It's really fascinating. Tell us what you found. Yeah, what we dived into was really one of the main causes of the racial wealth gap in America. We have learned a lot about in recent years about how there's this persistent gap in wealth between black families and white families, and and how that kind of nause at the economy. One of the main causes of that is the home ownership gap. Black families, about forty of them own the homes that they live in

versus about of white families. And that is a gap that has persisted for years. And one of the things we saw in recent years is the big banks in America, alongside other companies, make some big promises to the black community, to the USA economy to try and close that racial wealth gap, that home ownership gap. And so we dove into that, and that took us all the way down

to the block of Waber Captain. Now, when you got there, when you dig when you were digging deep, let's say, did you find that promises were made and well, not kept necessarily, but at least the attempt was there. So the promises that we looked at were some big, ambitious promises made by the banks. Wells Fargo in made the

biggest of those. It said that it would lend sixty billion dollars that's billion, not a million, sixty billion dollars to create two hundred and fifty thousand black homeowners in America within a decade and so we looked at the data and what we found was that actually every year since making that promise, Wells Fargo, which was the biggest bank player was actually the biggest player in the mortgage market in back in that every year since making that promise,

Wells Fargo has actually backed fewer mortgages to black home buyers than it did the year before, and that it's gone down to a point where actually the San Francisco based lender underwrote forty fewer mortgages to black buyers than it did in when it made that promise. It isn't

the only bank to have made such a promise. JP Morgan in October twenty after that summer of racial reckoning that we had in America, and made a promise to create or originate mortgages to an additional forty thousand black and Latino buyers over five years. Now it's much earlier into delivering on its promise. But in one it originated just two more mortgages to black comebuyers than it did in the year it said as a benchmark, and it's lending to Latino home buyers actually went down in Bank

of America has made some some slightly different promises. They're they're they're broader, they're harder to measure, but it's pledged thirty billion dollars in lending and down payment assistance to

minority and low income homeowners in America. All of this matters because what we're seeing across the board and what we've seen over the last fifteen years, it's been a big dip in in originations and mortgages that are issued to two black home buyers in America, and that hasn't caught up with where we were back If you remember the last financial crisis of the two thousand and eight two thousand nine, the subprime crisis was the type of lending we had back in the early two thousands that

beetn't caught up to those levels until actually in the middle of the pandemic. And in that time, we've had a huge housing boom of property boom in America, and there's a lot of wealth that's been created for homeowners in America that black families simply have missed out on because they have that lower homeownership break. All Right, just terrific reporting, Sean, Thank you so much for digging deep into this issue. You can find it on Bloomberg's Big

Take and on the Bloomberg terminal. Thank you so much, Sean, thanks for having me, Bloomberg Senior economics writer Sean Donn And and coming up on Bloomberg Daybreak weekend, things aren't exactly looking up for the UK economy in three more on that just ahead. I'm Amy Morris. This is Bloomberg. This is Bloomberg Daybreak week and our globe will look ahead at the top stories for investors in the coming week.

I'm Ammy Morris in Washington. Up later in our program as President Biden really finally hit his stride, but first a roller coaster year for the UK economy, with political upheaval adding to the already gloomy economic outlook. Things aren't looking up in three either. The o E c D is warning the UK is said to be the worst performer in the G twenty Russia for the next two years. For more, let's go to London and bring in Bloomberg

Daybreak Europe anchor Stephen Carroll. We've had three prime ministers, four finance ministers, and one ill fated budget in the UK this year, all of that dragging the pounds than an inch of parity versus the US dollar at one point. Overall, it's been quite the wild ride for the UK economy. Now the Bank of England is expecting a prolonged recession in twenty three. Joining us to discuss the year that was and what's ahead our UK correspondent Lizzie Byrden and

our senior UK economist Dan Hansen. And Lizzie, let's start with you. One measure of the volatile as we've seen this year is in the pound. Talk us through what were the highlights and low lights for sterling? And two, I think it's very obvious what the low light would have been, but you could say that this whole year

has been an annus horrible ifs for sterling. So we started the year at one dollar thirty five and then the pound dropped to a record low in September of near adult the parity, and of course that was just after the mini budget. And ultimately it was the chaos in currency and FX markets that ousted Liz Trust. They were the guardrails on the government in the end. Now we've got Risci Snack in number ten. His fiscal plans

are obviously more austere than Lizz Truss. Is this Dullness dividend has helped to recover the pound somewhat, but even after the recent rebound, it's still sterling down almost ten percent since the start of the year. Yes, dollar strength has played in but to give it some historical context, two has been the pound's worst ever apart from the break sit vote, the financial crisis and Black Wednesday in ninety two another collection of greatest hits. Don How is

the UK economy finishing the year compared to how it started? Well, it started the year pretty strongly if you look at the data, because if you if you remember back then,

it seems an awful long time ago. Now we had we had the rebound from the homochron wave, so you had a pretty strong GDP reading at the start of the year, and since then things have really really slowed down to the second quarter was there was growth in the second quarter, but it was weak, and then we've obviously had a fall in GDP in the third quarter, and most forecasts are expecting a fall in GDP in

the final quarter. Though I think I know we've we're gonna we're most likely going to have two consecutive quarters of negative growth, which as we all know that will signal the start of a technical recession, but I think try and sort of put a positive spin on it. Actually, those two quarters have been very, very mild in terms of their drops. So you've had a point two drop in the in the third quarter and the fourth quarter.

The Bank of England has said that it thinks that the drop waby point one percent, So yeah, us it's not good news. But when you put that in the context of the living squeeze that is occurring here in the UK, actually the economy is holding up relatively well. Yes, we were probably heading into a recession of protractive recession, but it's going, at least on our forecast, to be relatively mild. So I know, those aren't Those aren't words

people want to hear, recession, downturn. But actually when you look at the depth of it relative to his past down turns, it doesn't look like it's going to be

as bad. Okay, Lizzie. In terms of Sterling, are we over the worst of the upheaval that we've seen this year when we look into three Yes, But says she trepidaciously, if you look at the options market, there's currently a fort chance that the plan is going to get stuck between one dollar turn and one dollar thirty for the next two years, and that's still it's weakest have a trading range. And that's because of the factors Done talks about.

We've got a year of high inflation ahead rising interest rates to combat it, housing slowdown, and this is a content innuation of a long term downward trends. So the five years before the Brexit vote in twenty sixteen, the pounds average was about one dollar fifty nine. The five years before that it was about one dollar seventy six.

But it's not just a Brexit thing. It's what Brexit has created, more trade frictions with the EU, It's left the labor market short of workers, it's undermined business investment. Looking ahead Bank of America. I was there speaking to the economists last week. They say that Sterling in three is actually going to be dominated by Brexit and whether this government can reach a compromise on Brexit, whether they can find a sustainable solution on the Northern Ireland Protocol.

And I have to say, even though Rischie Sunac, probably for the benefit of the Brexit wing of his party, has talked tough on not wanting a Swiss style deal as as was reported. Actually in the markets, people are very optimistic that he will be pragmathematic on Brexit. So for me, three is about feeling how much he's willing to stand up to his party or in their eyes,

the degree to which he's a true Brexitter. Yeah, indeed, And of course the deadline for that that everyone's notionally aiming for is the anniversary of the Good Friday Agreement in April of next year. Is the hope is that they will have done a deal between the UK and the EU by then that will resolve the issues and allow there to be an official commemoration of that deal without the ongoing political tensions that we've seen in Northern

Ireland on that issue. And optimistically all of this back and forth is just choreography to show that everybody's trying to defend their sides, but hopefully we'll get to something then. Yeah. Let's take a listen now to what the Bank having The Governor Andrew Bailey said that their last rate decision about what he expects in terms of inflation next year.

We think we've seen, possibly this week, the first glimmer that with the figures that were released this week that it's not only beginning to come down, but it was a little bit below where we thought it would be, and that's obviously very good news, but it's a long way to go, and there is and we expect that

to happen. By the way, we expect inflation to start falling more rapidly, probably from the late spring onwards, but there is a risk that it won't happen in that way, particularly because the labor market and labor supply in this country are so tight. Okay, So that's what Andrew Bailey has to say about the outlook for the next year. Dan Hansen, what are the particular pressure points you're watching

out for going into next year. Andrew Bailey seems to think things are going to improve pretty soon an inflation, Yes, so I think I think you can think of the inflation path next year in sort of to two elements to it. So over the winter and into the first quarter of next year, we don't think inflation is going to drop below ten per cent. I think our forecast in March in fact, just has it dropping a little bit low below ten per cent here to nine and

a half. So you've got pretty sticky inflation for the next sort of four or five months. But then what you'll we think at least and we hope you'll see, is these base effects coming through um and the impact of the energy price rises that we've seen this year falling out of the annual comparison. And what the Governor was a loud into there was the good news from

the latest inflation print was that core goods inflation. So this is a bit of the inflation basket that's been really impacted by supply constraints, and we've seen it coming off very sharply in the US. We think those that that part of the inflation basket is going to ease quite sharply as well. So I think what you'll get

is is a pretty sharp fall in inflation. But the key thing to remember here is that I think the easy bid is getting from say ten to four or five, the hard bid is getting from four or five to two.

And what that reflects is what's going on, as the Governor mentioned there as well, is what's going on in the labor market, and what's going on in with services inflation, and before you get services inflation, what's going on in pay So I think you'll see you'll see a pretty sharp drop this year, but they're the sort of easy yards.

You've got the hardy yards to come. And that will that will only really be revealed in the latter half of three the sort of what's the residual bit of inflation and that that's really what will that will focus the bank next year as well, Lizzie, we are rattling towards the end of the year in the UK and amidst this massive wave of strikes. Is that going to be a continuing theme when we think about the labor

Marcus next year. Well, my colleague Philip aldric Our, senior UK Economics reporter, had a really interesting conversation with Charles Goodhart, who's a former bankoving the policymaker, and he said that it might not just be a winter of discontent, it could be a year of discontent unless the government agrees to a wage deal to end this industrial action. Labor's point the opposition Labor Party is that you need to treat it as a whole rather than strike by strike,

union by union. And if you think about what DNS saying that this inflation is going to be sticky, it's not going to drop below ten percent for four to five months. That really keeps the pressure on the government. Okay, thank you very much to Blomberg's UK corresponded Lizzie Burden, and to our senior UK economist Dan Hansen as well. I'm even Carl in London. You can catch us every weekday morning here for Bloomberg Daybreak Europe, beginning at six

am in London and one am on Wall Streets. Thank you, Stephen. Coming up on Bloomberg Daybreak weekend. President Biden continues to chalk up successes. But can it last? We'll find out. I'm Amy Morris. This is Bloomberg broadcasting live from the

Bloomberg in our active broker studio in New York. Bloomberg Even three oh to Washington, d C, Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine sixty to the country Sirius XM Channel one nineteen to London d A B Digital Radio, and around the globe the Bloomberg Business Act and Bloomberg Radio dot Com. This is Bloomberg day Break Weekend. I'm Amy Morris in Washington with your global look ahead at the top stories for investors in the coming week has does it in Biden

really finally hit his stride. Were more here in our Bloomberg NY nine one newsroom in Washington. We go to Bloomberg Sound On host Joe Matthew. Jo thank you Amy. President Biden feeling good as he heads into the new year after what was arguably the best mid term performance

by a sitting president in decades. The President saying, it's clear Americans are committed to protecting and defending democracy, a strong rejection of election deniers at every level, from those seeking lead our states and those of seeking to serve in Congress, and also those seeking to oversee the election. Joining us now to talk about this, Bloomberg White House reporter Josh wind Grove, Josh, happy holiday, is great to see you. Thank you for being here as we talk

about this moment for Joe Biden. Uh, not only did he outperform in the mid terms, your reporting shows that he did a bit of an end run around his own advisors by insisting that democracy itself beyond the ballot as opposed to so many other issues that were in the air. I guess his instincts were correct. Yeah, I think, Look, this is a guy that likes to measure twice or three times and four times, five times and then cut once. Right, Like the knock on that strategy is sometimes they get

to be a little flat footed. But on the flip side, you know he thinks that he keeps his eye on the ball or you know, has a focus that he's not distracted. Uh. You know, rewind to the start of the year, right, you know, the inflation was really taking off, the COVID's cases. We all remember the omicron start of Jurga was insane. Of course, Russia was about to invade Ukraine. Things were in installed in Congress, everything had collapsed with

Mansion and you know, things turned around. They got some bills through Congress. The mid term performance are pretty happy about and so on balance, you had Biden there being like, how can I frame this? How do we avoid the blood bath politically speaking that presidents usually see in the middle of their first term. And you know he's been sitting down and talking with historians that sort of thing. So that's when you got this focus on we gotta make it on democracy. We've gotta be like, vote for

anyone that will honor the result of the vote. Do you remember he did that speech in Philly that kind of bombed. It was like a weird background and like red and very like you know, the seventies horror film

kind of like look. So he did sort of took it a second kick at the can, a bit of a haphazard one here in d C. But they think that that was part of the message that resonated, of course in the broader context about their messages as well, you know, things like that moves on student loans for instance, motivating young voters, things like that, you know, cocktail and stuff. He's buoyant right now. You can tell, because he's a little chippy with the press that he feels boldened a

little bit right now. I like new Gingrich's take in your piece the former speaker basically referring to Joe Biden's challenges that lead many Republicans to underestimate him, his speech impediment, his memory lapses that lead new Gingrich to compare Joe Biden to Eisenhower or even Ronald Reagan. Yeah. Well, Gingrich just kind of put himself out on a limb, right If you read his blog post, essentially what it is he's he's enumerating a pretty sharp, grueling attack on Joe Bay.

But the headline is we keep underestimating. In other words, he's trying to convince his fellow sort of Republican brethren that that just sort of casting Biden is like, you know, either extreme, which voters tend not to believe because he's been around it kind of known quantity, or as you know, bumbling grandpa, great grandpa or whatever. Um. Then um. Then they sort of get away from the stuff that actually might work more and being like we should attack him

for his policy. So you have you have Gingrich saying, look, if we just write Joe Biden off because he's now eighty years old and we think he's going to stumble his way out of the presidency out of sixteen hundred Pennsylvania, then he thinks that they should give their head a shake. Because that's the argument from Gingris. You know, we reached out to a lot of Republicans for their thoughts on what new Gingridge is saying, we got a lot of

we got a lot of no responses. So you know, it's not it's not a it's it's a pitch that they're willing to let sail right by rather than thinking a wing at So we'll see where whether Gingrich is speaking for the sort of silent you know, chunk of the party who might think that. But remember we're sitting here. You know, Joe b and has not formally announced his re election campaign, but gosh, all signs point yes, and

it's right. This is a guy that is not looking for his exit, and he'll have inflation waiting for him when he makes that decision and when he enters the new year and the new Congress begins as he tries to put a good face on all in the world where inflation is rising a double digits, so many major economies around the world. Inflation is coming down in America, then again, ask Muhammadhill area. Inflation is not going to come down in an orderly fashion. We're gonna get sticky inflation.

The Bloomberg opinion columnists on Bloomberg. Of course, sticky inflation. It's come down a bit, the feed is still working, and you've also got the prospect of breaking the job market to fix the inflation issue. Josh, how do you square that when you're starting a re election campaign? You know, Look, yeah, the chances that even if it doesn't come down, you know, Joe Biden could be facing a recession either a year

or even six months out of the next election. That sucks for any for any president reelection technical term, right, yeah, that's that's the that's the macro term. Um. So you know he right now. I think that they are praying that some of the stuff kicks in and in the meantime, some of the stuff that they have done, which is a little bit nibbling around the edges, were being honest, but not for the people who it affects. It starts to kicking things like Medicare capping the cost of insulin

for certain people starting in January. That's a big deal. Biden's approach to inflation has essentially been we can try to lower certain costs per month for certain people to try to ease the pain across the board and cost that everyone in America is facing. The thing is, if he did get a recession, energy prices would fall, food prices would fall. He enters the final year of a

presidential campaign, inflation is licked. We're going to fix the economy, and the guy I'm running against it could be under indictment by them. Yeah, I mean yeah, I don't know that any president wants to see a bunch of people losing their jobs, and right and then, like equity matters

to this administration. I mean, some people think it might be virtue signaling here and there, but like the people that will lose their jobs are the types of people workers that Joe Biden at least rhetorically talks about a lot, Right, There are people that that live paycheck to paycheck, hourly wage workers, often minority, just like he grew up right exactly so, like he genuinely seems to just believe that he thinks that there has to be a third way,

There has to be a magical sort of landing here where And you know, he might be right, I suppose, I don't know, but that whereby the inplation can come down and all those folks who so often are the first ones to take it on the chin are the ones that don't have to do it yet again, I think, and that that is what he's sort of holding his breath on. Spending time with Josh wind Growth here as we slide into the new year, and I have to

ask you about Ukraine. What a performance this week in an appearance to historic appearance from President Zelenski speaking to a joint session of Congress. Course, he spent most of his day with President Biden at the White House, and there was one resounding message, Your money is not cheerity. It's an investment in the global security, and dumont or

see that we handle in the most responsible way. So in a remaining moment here, Josh, how much of a challenge is it going to be for Joe Biden to continue the money and the weapons flowing to Ukraine in this new Congress? We don't know. There's one challenge that he can control or has more control over, and there's another he can First just to back up very quickly,

you know, this is a surprise. It is that Biden is seems pretty jazz that he was that that Zelenski is here, he seems to have gotten along well with him. The takeaway is twofold number one, big standing ovations for Zelenski, notable exceptions among top Republicans, or at least prominent Republicans. The question is the billion or so that that that that the OMNI carved out for Ukraine? Is that the

last bucket for Ukraine? Will Kevin McCarthy or whoever led Republican House allowed another dollar to go at the door very unclear. The second thing which got toward Zelenski publicly asked for in Congress next to buy him wherever he could, you know, shouting from the rooftops was more weaponry, more band's weaponry, particularly offensive weaponry, and Biden has been hesitant something that's a different story. I want to trigger something, so that's real rob will Biden start ratching up the

type of gear he's willing to send. Lensky's already been ratching it up, including the Patriot miss that he announced, and will Congress might be a different conversation, different conversation he certainly does not seem Keenanity's hinted that he thinks NATO's support for the war would fall apart if you did it. So, so Biden has his own reservations about what to send. Congress has their own reservations about what

check to right. Those two things, you know, are are hanging in the background, But the top line was Joe Biden standing there and pledging Ukraine that US will be there for them as long as they're in this war. Historic moment. Josh wind Grove is the man that Joe Biden looked at and said, if I had his voice I would have been elected president a lot earlier. Yeah, yeah, great, It's great to see what am I doing with my life here. Well, you're talking on the radio. Everyone's listening

to your voice. Happy Holidays, Happy New Year, see twenty three. Thank you, Bloomberg White House reporter Josh wind Grove. Amy, All right, thank you, Joe. That was Joe Matthew, host of Bloomberg Sound On from our Bloomberg Noddy nine one news room here in Washington. And you can hear Sound On with Joe Matthew weekdays at five pm Wall Street Time. And for more political news coverage, you can tune into Balance of Power with David weston weekdays at noon Wall

Street Time. All of that right here on Bloomberg Radio. Coming up next on Bloomberg Daybreak Weekend to look at market trends to watch out for in China. I'm Amy Morris, and this is Bloomberg m This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Amy Morris in Washington. COVID

is still very much hanging over China. Bloomberg Daybreak Asia host Brian Curtis keeping track of all of it for US, Brian Amy, China is reopening and Hong Kong is trying

to rest back the mantle of Asia's world city. As a result, we're curious what new trends we might see in markets in twenty twenty three for Hong Kong and China joining US now, is Sofia Orte Costa, Bloomberg's chief China Markets correspondent Sofia After a couple of very tough years for these two markets, might we see better market conditions in three? I think the living with COVID story UM is the biggest theme going into next year. You know, there's still a lot of questions over whether this is

reckless or not. Some people are calling it the big U turn, but it's been so dramatic for China, it's perhaps the big V turn on COVID zero. So UM. The key thing here is data. You know, will China's reopening be positive or negative on the economy? Will it be good or bad for consumption? Is they're going to be short term gain, short term pain, um for longer term gain in terms of growth and also for the

rest of the world. You know, is it inflationary or will it actually lead to deflation, So it will be harder actually to track the effect of the outbreak on China's economy because actually China releases after releasing December data, it only then releases combined January and February data in March, So it will be a while before we get any kind of real sense of on the ground impact from this.

Do we have a sense that markets will get well out in front of the economy or because the reopening has been so uneven so far, will investors really wait until they see the proof in the pudding. Investors have kind of priced in the first leg of the reopening story um at some some cull side analysts saying that

about forty has been priced in. I mean, also, Brian, let's not forget the huge outflows that Chinese assets had in It really didn't take much um to move to move the needle when it came to markets, you know, you only had to revert to the mean. Is already a gain for for Chinese stocks. I'm curious whether investors think the Party has done a flip flop on market friendly and business friendly policies going forward and changing from what used to be pretty restrictive policy over the past

eighteen to twenty four months. It's been perhaps the biggest surprise um and in this year is the policy environments turning really more friendly for for China China investing. We tend to think that China cares cares more about the economy than it does about markets, and now it's all about creating a better environment and market confidence. Really taking

sense of stage, this is highly unusual. The last time we heard any kind of wording around this was in eighteen when the trade war was really hammering confidence in Chinese markets. So what's that means? We still don't know. Um A lot of support for a private enterprise seems to be the focus. Also refinancing help for private developers. You know, we're seeing a revival in in in financing

efforts for property companies. That is extremely different and a complete one eighty to what to the trends we've seen in in the past two years, Is there one big mega trend we can identify for next year? One big mega trend? I mean beyond the reopening story, um is,

I think decoupling, whether that's still a thing. Every single geopolitical analyst was talking about that and freendch shoring whether that's whether people are moving out of China and whether you know, China really showing itself as a more friendly actor in the global stage. We seem to get we seem to be getting um some evidence of that now. So is China aligning itself less with other actors like

like Russia and moving close to the West. That would be a hugely positive development when it comes to investing in China. Sophia, thanks so much. Always enjoy your insight. Sophia Orte Costa, Bloomberg's chief China Markets correspondent. I'm Brian Curtis, along with Doug Krisner. You can catch us every weekday here for Bloomberg Daybreak Asia, beginning at seven am in Hong Kong and six pm on Wall Street. Amy all right, thank you, Brian, and that does it for this edition

of Bloomberg Daybreak Weekend. Join us again Monday morning at five am Wall Street time, where the latest on markets overseas and the news you being to start your day. I'm Amy Morris. This is Bloomberg